Purchases of digital music or videos can be completed almost instantly so one might expect the money involved to move just as fast Customers may have once been happy to wait an hour for a movie to download but they are now accustomed to having their selections instantly stream on demand noted Julian Sawyer chief operating officer of Starling Bank That swiftness hasnt yet become commonplace for payments processing though which can still take days to settle We have so much technology that enables us to do so much instantly and then we go to our bank and say Can we just pay a recipient in the States Sawyer said And its like Well do a SWIFT message and itll cost 10 and you may get it on Monday Thats really really poor UK organizations are looking to tackle this problem by leveraging the local Faster Payments Service FPS Uptake continues with approximately 500 million payments processed on the scheme in Q2 2018 reflecting a 25 percent year-over-year increase Financial players seeking to offer FPS access to their clients have two options Join the scheme directly as 21 FIs have done so far or partner with one of those participant FIs The latter option means avoiding the costs and complexities required to join Sawyer noted Direct participation was a must for Starling however and its decision to join last year made it the 13th FI and first challenger bank to do so It doesnt make sense to be a bank and be in the world of payments and then use somebody else to do payments or to not be in real time Sawyer said Taking the Direct Connection For Starling serving business and consumer clients means catering to the growing demand for instant services The FI could have turned to a sponsoring FPS participant for the settlement and or connection needed to use the scheme but would have been dependent on a partnership with an established legacy bank Sawyer explained This wasnt ideal for the challenger In that scenario youre reliant 100 percent on their technologies he said You might have this wonderful new kit doing some really nice shiny stuff on your app then youre sitting behind a big Royal Bank of Scotland mainframe to do the payments Directly connecting to FPS gave Starling the flexibility and control it needs to be competitive We said Lets not be tied up to these incumbents Sawyer recalled Impact for Clients Starlings decision to connect directly means it can act as a sponsoring participant and include the faster payments connection in its client offerings The company has since worked to provide a set of application program interfaces APIs that support real-time access to faster payments particularly for financial organization clients seeking to leverage the service for new products Were sitting behind this infrastructure and providing a service to these organizations Sawyer said Each one can create its own unique propositions Starling has seen the impact through new partnerships with companies like Mastercard It provides FPS access that enables Mastercard Send to issue real-time bank-to-bank payments in the UK and Europe for example Meanwhile a prepaid card issuer can now support loading funds onto the card in real time which could be useful for paying gig economy employees Businesses have their own set of demands wanting not only faster fund transmissions but also access to the better data often supported by faster payments schemes If it is a straight-through process and doesnt have to touch a human its really really fast and really really cheap Sawyer said Some older payment systems have a lot of errors and require manual reconciliation which increases cost and time scale and the customer experience is just not met FIs are increasingly working to offer customers instant payment services that provide richer data and quicker transactions Starling seems to be betting on a DIY approach in accessing faster payment schemes If all goes well the challenger bank may prove that it pays to be direct